Deutsche Boerse may drop Euronext bid

German exchange reportedly rules out any higher offer

SimonKennedy

LONDON (MarketWatch) -- Deutsche Boerse is reportedly considering dropping its takeover bid for pan-European stock-exchange operator Euronext after deciding against raising its offer.

A number of news services, citing sources close to Deutsche Boerse's (581005) supervisory board, reported that the German exchange ruled out an increased bid Tuesday at a strategy meeting.

Deutsche Boerse's management team is now considering whether to simply withdraw its offer, wire services reported.

The German exchange is battling with NYSE Group Inc.
NYX, -0.60%
for control of Euronext (005777), which has already agreed to a deal with the U.S. exchange.

Shares in Euronext fell 3.5% to 90.05 euros a share late Tuesday, and shares in NYSE Group dropped 2% in early U.S. trading. Deutsche Boerse shares declined 2.3%.

Under Deutsche Boerse's offer, shares in a new holding company would be distributed between Deutsche Boerse and Euronext shareholders in a ratio dependent on the three-month average market capitalization of the companies, with a further 2 billion euros ($2.6 billion) distributed according to the same ratio.

Under the NYSE Group's offer, Euronext shareholders would receive 0.98 shares in the combined NYSE Euronext, along with 21.32 euros in cash for every Euronext share.

Shares of the NYSE have surged over 50% in the last two months, making its offer for Euronext increasingly attractive and difficult for Deutsche Boerse to top.

Using Tuesday prices, the NYSE's offer is worth 92.38 euros per Euronext share.

Shareholders in Euronext are expected to vote on the NYSE offer in December.

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